Explore commonly used personal finance terms.
The Alternative Minimum Tax (AMT) credit is a tax credit that allows individuals and businesses who paid AMT in prior years to reduce their regular tax liability in subsequent years. The AMT credit is generated when the AMT exceeds regular tax liability, and it can be carried forward to future years, offsetting taxes owed when regular tax exceeds AMT. This credit helps taxpayers recover some of the additional tax burden from AMT payments, easing the long-term tax impact of AMT by reducing tax liabilities in future tax periods.
